The government wants a push towards more energy-efficient vehicles, which is not something Hummer fits in with. It is also reported to be reluctant to allow a relatively new company with no overseas business experience to take on a high-risk foreign asset.

A Tengzhong spokesman said: “Some people may have views and speculation but the Chinese government has a process that we respect.

“We have only just signed an MOU (Memorandum of Understanding), but as we develop our proposals with GM and Hummer we will continue to work with the appropriate authorities.”

Banks could also be reluctant to provide Tengzhong with the required funds as it is not a well-established company, but the spokesman said the company was in advanced talks with banks about raising the finance for the deal.

GM has said it doesn’t expect the US government to oppose the sale as it aims to concentrate on its four key brands of Buick, GMC, Chevrolet and Cadillac.

Sichuan Tengzhong Heavy Industrial Machinery was formed in 2005 following a series of mergers and it mainly produces construction machinery and special-use vehicles.